Oct. 10 (Bloomberg) -- Saudi Aramco plans to increase oil exports to China by at least 9 percent this year to meet rising demand from refiners in the world's fastest-growing major economy, said two company officials.

Shipments to China may climb to more than 26 million metric tons of crude this year, according to the officials from Saudi Aramco, who asked not to be identified because of company policy. Saudi Arabia's only crude exporter increased oil exports to China by 7.6 percent last year to 23.87 million tons.

China plans to boost refining capacity by 25 percent in the five years to 2010, the government said last March. The nation's state oil companies are building units known as hydrocrackers and cokers to process cheaper varieties of oil from the Middle East with a higher sulfur content.

``Chinese oil companies are more willing to process high- sulfur crude from countries like Saudi Arabia to cut costs,'' said Gong Jinshuang, a Beijing-based senior analyst at China National Petroleum Corp., the nation's largest oil producer, ``The imports from Saudi are poised to rise because the Middle East country is heavily eyeing the huge market here.''

China Petroleum & Chemical Corp. and PetroChina Co., the nation's two largest oil refiners, are upgrading facilities to process low cost high-sulfur crude to help cut losses caused by government caps on fuel prices.

Saudi Arabia shipped almost 17 million tons of crude oil between January and August to China, an 8 percent increase from a year earlier, according to the latest customs data.

Sinopec Refineries

Sinopec, as China Petroleum is known, started upgrading a 215,000 barrel-a-day refinery in Shanghai in October to enable the plant to process cheaper high-sulfur oil, Ma Ping, the refinery's spokesman said in November.

The Gaoqiao refinery in Shanghai will shift to using crude from regions such as the Middle East to cut costs, Ma said then. The refinery has been processing low-sulfur crude from Asia, North America and Africa. Oil with a lower content of sulfur, a pollutant, is more expensive than high-sulfur grades.

Sinopec, which supplies about 80 percent of the fuel in China, has incurred losses from processing crude since July, Deputy Chief Financial Officer Liu Yun said Aug. 10. China controls diesel and gasoline prices to curb their impact on inflation, which climbed to a 10-year high of 6.5 percent last month.

Joint Ventures

Saudi Aramco agreed with Sinopec and Exxon Mobil Corp. in March to set up ventures in China's southern province of Fujian, the first with foreign partners for refining, petrochemicals and fuels marketing in China.

The Saudi company is also expected to complete talks to buy a 25 percent stake in a 200,000 barrel-a-day refinery Sinopec is building on the nation's eastern costal Qingdao city within the year. The 12.5 billion-yuan refinery will process Saudi crude.

``Saudi Arabia wants to export more crude to China to help strengthen its presence in the nation's downstream refining and chemical market,'' Gong said.

China's refining capacity will rise to 355 million tons by 2010 from 285 million tons in 2005, the National Development and Reform Commission, the country's top economic planner, said March 2006.

China's oil demand will climb 5.7 percent to 7.6 million barrels a day this year, the International Energy Agency said Aug. 10.

The nation's oil imports from Saudi Arabia rose to 2.6 million tons in August, the highest since at least 2004, according to customs figure on Sept. 24. Eight-month imports of Saudi crude climbed to 16.91 million, accounting for 15 percent of the nation's total overseas crude purchases.

To contact the reporter on this story: Winnie Zhu in Shanghai at wzhu4@bloomberg.net.

Last Updated: October 9, 2007 18:34 EDT